Whether South Sudan ordered an end to its 10-day occupation of Sudan's main oilfield at Heglig or whether Sudan chased South Sudanese forces out is not at present the main issue. These are conflicting reports that can be sorted out later. The end result is that after being on the brink of war, the two sides have, at least for now, stepped back. South Sudan broke away from Sudan last year after an independence vote, and the secession was supposed to resolve some of the existing problems, ranging from the weakened economy to residence and travel rights for thousands of people stranded on the wrong side of the borders. However, it instead ended up creating a new set of realities, none more controversial than the inability of the two countries to reach a deal on oil ownership, production and distribution. Both sides claim the oil-producing town of Heglig, which provides more than half of Sudan's oil, as their own, though Heglig is internationally accepted to be part of Sudanese territory. In a sudden escalation, South Sudan last week sent troops to Heglig, sparking condemnation from the UN, the US and Britain. Juba was incensed that Khartoum wants to charge it one-third of the price of oil in transit fees. Khartoum, for its part, says that it has built the oil infrastructure and deserves to recover some of its investment. Since it could no longer export its oil through the north, Juba was determined to extract revenge from Khartoum. As the negotiations ground to a halt, Juba decided to stop producing oil altogether, a decision that deprives it of 98 percent of its national income. As a result of cutting off its nose to spite its face, South Sudan will be left without the source of income that was supposed to fund its nascent institutions and help revive its economy. On the other hand, Khartoum will be left without oil exports. Khartoum lost three-quarters of its oil revenue after the secession; now it could lose the rest. Juba has taken a big gamble in trying to occupy the vital oilfields of Heglig. It clearly wishes to force Khartoum into offering better terms for trade and travel, but its action has produced the seeds of a war. The apparent failure of the governments of Khartoum and Juba to address the oil issue has cast doubt on their abilities to bring about the progress and prosperity they had promised their respective nations. While policymakers in the two Sudans should be focusing on the need to feed the starving millions in countries that could easily become the poorest in Africa and the Middle East, they are instead funneling funds to war machines. The sudden flare-up on the borders makes clear that even though the two countries have reduced the risks of an all-out confrontation, the problems facing Sudan and South Sudan are much harder to resolve than once thought. __
